Abstract:
The advent of current technology such as internet use is developing fast and is
constantly bringing new magnitudes to our daily life. The banking industry is one of the
sectors that has benefited from the evolving technology by the introduction of Electronic
banking (E-banking) systems which provide easy access to banking services. This study
was carried out to assess the prospect and challenges of E- banking in Ethiopian
sector, in southern Ethiopia district. The study also identified the main E-banking
products of the bank namely: Automated Teller Machine (ATM), mobile and Internet
(online) banking, electronic funds transfer, direct bill payments and credit card.
Most respondents (44.40%) prefer ATM relative to other E-banking products, however,
most customers also uses combination of the products. The study identified benefits
customers derive from E banking as saving of time, quickness in banking transactions,
easy access to account details and reduction of long queues in banking halls. According
to the study, customer satisfaction and competition from other banks were the main
influencing factors for E-banking adoption. Notwithstanding E-banking advantages, it is
confronted with challenges such as frequent network failure, high bank charges,
limited amount of cash withdrawal and wrong debit was identified as the paramount
challenges. Nevertheless, the researcher recommended that for effective E-
banking system, customer education and marketing of E-banking products should be
the key strategy to use and to attract more customers, increasing security for E-banking
products, reduction of charges of E-banking products and increasing more ATM outlets
in the country.
